ANTI-MONEY LAUNDERING ACT

By: ATTY. JACINTO D. JIMENEZ I. Money Laundering Definition Money laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. It is committed by: 1. 2. Any person knowing that any monetary instrument or property relates to the proceeds of any unlawful activity, transacts it. Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates its transaction. Any person knowing that any monetary instrument or property is required to be disclosed and filed with the Anti-Money Laundering Council, fails to do so. (Section 4)

3.

Institutions Covered 1. 2. Banks, non-banks, quasi-banks, trust entities and all other institutions and their subsidiaries and affiliates supervised by the Bangko Sentral ng Pilipinas. Insurance companies and all other institutions supervised by the Insurance Commission.

Securities dealers, brokers, salesmen, investment houses, and other similar entities managing securities or rendering services as investment agent, advisor or consultant. Mutual funds, close-end investment companies, common-trust funds, pre-need companies and other similar entities. Foreign exchange corporations, money changers, money payment, remittance and transfer companies and other similar entities. Other entities dealing in currency, commodities or financial derivatives, valuable objects, cash substitutes and other similar monetary instruments or property regulated by the Securities and Exchange Commission. [Section 3 (a)] Covered Transactions

Any transaction in cash or other equivalent monetary instrument involving a total of more than P500,000.00 in one banking day is covered. [Section 3(B)] Suspicious Transactions Suspicious transactions are transactions with covered institutions, regardless of amount, where any of the following circumstances exists: There is no underlying legal or trade obligations, purpose or economic justification. The client is not properly identified. The amount involved is not commensurate with the business or financial capacity of the client. It may be perceived that the transaction is structured to avoid being the subject of reporting requirements. Any circumstance which deviates from the profile of the client or the client's past transactions with the covered institution. The transaction is related to an unlawful activity. The transaction is similar or analogous to any of the foregoing (Section 2 [b-1)] Unlawful Activity Kidnapping for ransom Sections 3, 4, 5, 7, 8, 9, 10, 12, 13, 14, 15 or 16 of the Comprehensive Dangerous Drugs Act Section 3, paragraphs B, C, D, E, G, H and I of the Anti-Graft and Corrupt Practices Act Plunder Robbery and extortion Jueteng and masiao Piracy on the high seas Qualified theft under Article 310 of the Revised Penal Code Swindling under Article 315 of the Revised Penal Code Smuggling Violation of the Electronic Commerce Act Hijacking, destructive arson and murder Fraudulent practices under the Securities Regulation Code Offenses of a similar nature punishable under the penal laws of other countries. [Section 3 (i)]

II.

Antil-Money Laundering Council A. Composition Governor of the Bangko Sentral ng Pilipinas Insurance Commissioner Chairman of the Securities and Exchange Commission Requirement for Discharge of Functions: - Unanimity C. Important Functions To require and receive covered or suspicious transaction reports from covered institutions. To issue orders to the Supervising Authority or covered institution to determine the true identity of the owner of any monetary investment or property subject of a covered transaction or suspicious transaction report or request for assistance from a foreign state, or believed on the basis of substantial evidence be the proceeds of an unlawful activity. To institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General. To cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offense. To investigate suspicious transactions and covered transactions deemed suspicious after an investigation, money laundering activities, and other violations of this Act. To apply before the Court of Appeals ex parte for the freezing of any monetary instrument or property alleged to be proceeds of any unlawful activity. To implement measures to counteract money laundering To take action on any request from foreign states for assistance in their anti-money laundering operations. To develop educational programs on money-laundering. To enlist assistance of any instrumentality of the government. To impose administrative sanctions for violation of laws, rules, order and resolutions (Section 7)

III.

Prevention of Money Laundering A. Covered institutions shall establish and record the true identity of their clients based on official documents. Anonymous accounts, accounts under fictitious names, and all other similar accounts are prohibited. Non-checking numbered accounts are allowed. B. C. All records of all transactions of covered institutions shall be maintained for five years from their dates. Covered institutions shall report to the Anti-Money Laundering Council all covered and suspicious transactions within five working days from their occurrence, unless the Supervising Authority prescribes a longer period not exceeding ten working days. Reporting covered transactions are not covered by Republic Act 1405, Republic Act 6426, Republic Act 8741 and other similar laws. No proceeding shall lie against a person for making a covered or suspicious transaction report in the regular performance of his duties and in good faith. (Section 9)

IV.

Authority to Freeze The Court of Appeals, upon application ex parte by the Anti-Money Laundering Council, and after determination that probable cause exists that any monetary instrument or property is related to an unlawful acting may issue a freeze order for twenty days unless extended by it. (Section 10)

V.

Inquiry into Bank Deposits The Anti-Money Laundering Council may inquire into any deposit or investment with any bank or financial institution upon order of a court in case of violation of this Act if there is probable cause that it is related to an unlawful activity or a money laundering activity, but no court order is required in cases involving unlawful activities in Section 3 (i) (1) (2) and (12), i.e. kidnapping for ransom, violation of the Comprehensive Dangerous Drugs Act, and hijacking, destructive arson and murder. To ensure compliance with this Act, the Bangko Sentral ng Pilipinas may inquire at any deposit or investment with any bank or financial institution in the course of a periodic or special examination (Section 11).